Markets continue to trade rather lightly amid uncertainty around the possible war with Iraq. Hans Blix, UN weapons inspections chief, today delivered a more favourable report on Iraq’s cooperation with its inspectors.

Blix says the inspection process is improving in Iraq. He told the UN Security Council that his team has found no weapons of mass destruction in Iraq — but would not rule out the possibility they may exist.

The report comes as the U.S. and Britain consider putting foward a proposed UN resolution by Saturday authorizing military action against Iraq.

At midday, the S&P/TSX index is up 15 points 6,468. Volume remains on the light side at 80.7 million shares, with buying leading selling by a four to three margin. Losers outnumber winners however, by a nine to eight tally.

The golds are backing off a little, down 1.3%, with the broader market rallying a little. Materials and diversifieds are down, too. There are gains in financials, techs, telecoms and industrials.

Nortel is powering the way up, gaining 1.2% on improved volume of 14.4 million shares. There are also gins in ATI, Celestica, and Zarlink. Biovail has the biotechs up. And, the tech and telecom groups have had some support from earnings news.

Rogers is up 5.5% on news that it has posted earnings of $312.03 million in 2002. The company recorded income of $698.2 million in the fourth quarter, compared with a loss of $173.7 million in the fourth quarter of 2001.

Telus has gained 4% on news of its $229 million year-end loss. The net loss of $139 million in the quarter was primarily due to restructuring costs.

Sun Life is leading the financials higher, rebounding 0.8% in active trading.

Other gainers include Weston, Bombardier, Royal Group Tech and Southwestern Resources.

Gold stocks are sliding, led by a 2.6% slide in Barrick. Placer Dome is down 2%. And there are slides in Meridian Gold, Glamis Gold and Goldcorp.

Other losers include EnCana, Teck, and Inco on news that it has sold its Brazilian company, which holds the rights to the Onca-Puma nickel laterite project in Brazil to Canico. As a result of the closing, Inco will hold 18% of Canico and two Inco nominees will join the board of Canico.

IThe S&P/TSX Venture index has dropped four ticks to 1,083. Volume is on the light side there at 18.3 million shares. Stornoway Ventures is the day’s top trader, up 17¢ to $1.05 on 981,300 shares

In New York, traders have been following the UN inspection report, and trying to tease out its implications.

So far markets are hardly moving. The Dow Jones industrial average is down nine points to 7,740. The S&P 500 is down just a point to 817. The Nasdaq composite index has gained four points to 1,281.